According to a study by the Glassnode firm, the rewards obtained by Ethereum mining have reached a ceiling. Likewise, the study shows that the Blockchain network of this cryptocurrency has greater stability than in 2018, being the year that reached its best moment.
In this way, the miners of the second largest cryptocurrency are obtaining great results with the fees. On the other hand, the network hash rate has decreased, which means less time to search for valid blocks.
It should be noted that, according to data from the Blockchain network, the growth of this cryptoactive could continue to increase. The profit limit has been raised, and this could lead to a significant hash rate increase in the coming weeks.
What does increasing Ethereum mining rewards mean?
An important point that cannot be overlooked is that, Bitcoin’s recent surge is dragging the other cryptocurrencies behind it. However, Ethereum’s ability is not limited to shading the pioneering digital currency.
The data also shows that the growth and maturity of the Ethereum Blockchain network are better than those of 2018, when it registered maximums of $ 1,400. Taking these two aspects into account, it would not be surprising if current growth points there.
Another important fact is that, although network fees are high, the difficulty has been significantly reduced due to the low hash rate. The decrease in the hash rate stands at 25% compared to that of the summer of 2018.
Likewise, it can be concluded that, the lower the hash rate, the greater the amount of Gas as a reward that miners receive. The downside of this is that a low hash rate could bring with it certain levels of network insecurity.
Advantages compared to 2018
During the year 2018, when this crypto reached its peak, Ethereum mining rewards did not exceed 15%. Now they range from 16% to 19%, leaving expectations open for a major rally.
Regarding the limit of Gas used, an increase has been seen to double if compared with the year 2018. This Gas increase could have its origin in speculation with decentralized applications. DeFi for loans and earnings move like never before. This could directly impact price and further increase Ethereum mining rewards.
Everything will change, but when?
All this Ethereum performance logic is framed in the protocol Proof-of-Work (PoW), which would be replaced with the ETH 2.0 update. However, this expected renovation has been delayed multiple times.
The ETH 2.0 update will aim to replace PoW with the Proof-of-Stake (PoS)bringing an unprecedented evolution to a cryptocurrency of this magnitude and changing the Ethereum mining process at its roots.
Despite the fact that it had planned to be introduced at the end of this year 2020, its developers reported that a series of failures forced them to postpone it again. The tentative launch date is now early next year 2021.
In this way, Ethereum mining would undergo a radical change. Instead of many devices vying to validate blocks, they would now be randomly selected by the network.
Impact on the hash rate
Rumors about the release of the ETH 2.0 update by the end of 2020 impacted Ethereum mining. Much of those who dedicated their mining infrastructure rushed to switch crypto.
This despite the fact that the network developers gave assurance that the PoW would not be eliminated in one fell swoop, but that both modalities would remain together for an indefinite time before the PoS was completely left.
Data to consider
- The rise in Ethereum is located at 180% since the month of March, when the official announcement of the WHO about the Covid-19 pandemic occurred.
- Hash rate of the Ethereum Blockchain network has decreased by 25% since the summer of 2018.
- Gas limit reached doubles that experienced in 2018, when the network had its best moment.
- Ethereum 2.0 update, after a further postponement, is expected to be released definitively at the beginning of next year 2021.
- Ethereum is celebrating 5 years of existence since the genesis block was mined on July 30, 2015.
The information in this content has been extracted from reliable sources detailed below.:
1- Professional handling of content by the authors of CriptoTendencia.
2- External sources: Glassnode.com and Decrypt.com.